Stocks erased gains for a second day in the face of concerns that Federal Reserve Chairman Alan Greenspan may indicate tomorrow that interest rates need to rise further to contain inflation.
Anticipation of Greenspan's testimony before Congress overshadowed Texas Instruments' increase in its profit forecast, which boosted technology stocks. Energy shares such as Exxon Mobil led the retreat as oil prices had their biggest loss in three weeks.
The Standard & Poor's 500-stock index fell 2.59, or 0.2 percent, to 1194.67. The Dow Jones industrial average dropped 6.21, or 0.1 percent, to 10,476.86. The Nasdaq composite index slipped 6.98, or 0.3 percent, to 2060.18.
The Fed has boosted its benchmark rate eight straight times since last June, slowing the economy. U.S. economic growth will slow to 3.4 percent in 2005 from 3.9 percent last year, a White House report says, down slightly from its December forecast. Policymakers next meet to decide on rates June 29 and 30.
Exxon Mobil fell 72 cents, to $56.73, erasing a gain of as much as 0.9 percent. Occidental Petroleum dropped 8 cents, to $73.70.
Texas Instruments, whose semiconductors run more than half the mobile phones sold last year, gained 62 cents, to $27.90. The company predicted second-quarter earnings higher than its previous forecast as consumers buy new phones that surf the Internet.
General Motors, which said Tuesday it plans to cut 25,000 jobs, gained $1.29, to $32.02. Billionaire Kirk Kerkorian will boost his GM stake to 7.2 percent, short of his goal of 8.8 percent.
Google fell $13.56, or 4.6 percent, to $279.56, as prices advertisers paid to buy search-engine keywords fell from last month, according to a report published by Fathom Online, a San Francisco market research firm. Yahoo retreated 81 cents, to $36.63.
Caterpillar helped limit the decline in the Dow average, rising $2.05, to $96.58. The company raised its quarterly dividend and said it will split its stock 2- for-1.
Xerox advanced 52 cents, to $13.84.
New York Stock Exchange composite index fell 18.75, to 7180.57.
American Stock Exchange index fell 5.07, to 1507.88.
Russell 2000 index of smaller-company stocks fell 3.31, to 620.47.
NYSE: 1.33 billion shares, down from 1.44 billion on Tuesday. Decliners outnumbered advancers 4 to 3.
Nasdaq: 1.63 billion shares, down from 1.87 billion. Decliners outnumbered advancers 11 to 8.
Crude oil for July delivery: $52.54, down $1.22.
Gold for current delivery: $424.70 a troy ounce, down from $424.80 on Tuesday.